By Travel Forward
Blockchain is certainly causing excitement in the travel tech market. As companies and providers look for opportunities to use the technology, it is dividing opinions among specialists: does it create real opportunities for travel providers to deliver more innovative services, or is it overhyped?
The distributed data management capability (upon which cryptocurrencies such as Bitcoin are based) offers a number of useful features. High on the list is immutability – that is, once some information is stored on a blockchain, it cannot be removed – making for higher levels of security and trust without undermining privacy.
Meanwhile, as a blockchain is accessed by all stakeholders for a given use case, this means data is not locked into, or owned by, any one database or service. So, for example, multiple parties could use a single, shared blockchain for baggage tracking. This creates the opportunity for disintermediation, potentially decreasing costs for the final consumer.
It’s not hard to think of scenarios where these facilities might be useful: if you need an integrated, secure and distributed platform accessible by multiple parties as a basis for trust, Blockchain may be a good fit. Non-profit organisation Winding Tree believes an open source, decentralized travel distribution platform will level the playing field, such that small companies can compete with bigger ones providing better prices and better services.
A number of larger travel providers have come out as strong backers of Blockchain. Consider, for example, TUI’s blockchain-enabled system, Bed-Swap, that maintains hotel bed inventories in real-time: allow empty rooms to be offered in different markets within seconds, without needing an intermediary to manage the information or indeed, resulting transactions.
Singapore Airlines has also launched it’s digital blockchain wallet, KrisPay, that allows members of KrisFlyer, the frequent flyer programme, convert their air miles into digital units of payment for instant purchases at partnered merchants.
Start-ups are also looking to reap the potential rewards of Blockchain, such as the Arcade City platform, a peer-to-peer ridesharing network recently founded in Austin, USA. Arcade City is owned and operated by its drivers, dispensing with the need of a third party to add fees and increase costs, but still retaining the all-important elements of reputation and trust.
Despite the potential of Blockchain, it is still in its initial phase: observers advise against rushing too quickly into large-scale deployments. As noted by Travelport, Blockchain has potential to change the travel market in the medium to long term. However, now is a good time to learn more about its applicability and functionality, keeping an open mind as to scenarios that could offer a good testbeds for Blockchain, taking into account its relative immaturity as a technology.
The bottom line is, you can consider Blockchain right now if it can be used to create direct business value, i.e. make you more efficient, create ROI or reduce risk. If the business case stacks up, then the opportunity exists to grow skills and experience as well as responding to a need. At the end of the day, Blockchain is a useful tool, no more, no less, and should be treated as such.
The opinions expressed in this text are the author’s opinion and do not necessarily reflect the position of WTM Latin America.